India is launching its own CBDC - The E-Rupee will be named RPI.
10/9/2022, 06:39 AM
Since their inception, digital currencies have been gaining popularity all over the world, and India is no different. In the Union Budget announced on February 1, 2022, the central government announced the launch of the Digital Rupee – a Central Bank Digital Currency (CBDC) – from FY 2022-23 onwards. This move is being criticised by Indian cryptocurrency companies, who argue that the RBI is compare "apples to oranges".
Crypto firms are not satisfied with the central bank’s justification given in the its concept note for CBDC replacing virtual digital assets. They argue that the RBI's reasoning is flawed. In the concept note released on Friday evening, the RBI stated that it is the responsibility of the central bank to provide its citizens with a risk-free central bank digital currency that will provide the users with the same experience of dealing in currency in digital form, without any of the risks associated with private cryptocurrencies.
The CEO of a leading crypto exchange, who spoke on the condition of anonymity, said: "Is CBDC another Bitcoin? The central bank is comparing apples to oranges. Cryptos are tokens. CBDC is a digital currency. Are we comparing stocks to INR? I didn’t realise the only objective of CBDC was to substitute virtual digital assets."
His view was echoed by other industry executives as well, who said that the concept note showed that the regulator was adopting a somewhat constrained, conservative and out-of-date perspective on cryptocurrencies. They noted that globally, the pretext and premise of CBDCs are born out of a thought process to defend the fiat currency monopoly, and that in India, the RBI's approach reflects a resistance to cryptocurrencies rather than a willingness to coexist with them.
Some executives even welcomed the RBI’s move. UniFarm CEO said that the concept note takes a very nuanced approach towards the implementation of CBDCs within the Indian financial ecosystem and carefully projects positive use cases of digital currency in making India a truly digital economy.
Meanwhile, 105 countries, representing over 95 per cent of global GDP, are considering a CBDC, up from 35 countries in May 2020, according to the Atlantic Council's CBDC tracker.
CBDCs, or central bank digital currencies, are a type of digital currency that is issued by a central bank. They are different from traditional digital currencies, such as Bitcoin, in that they are backed by the central bank and can be used in the same way as regular currency.
CBDCs have the potential to change the way the global economy works, as they could make it easier for central banks to interact with each other and with commercial banks. They could also make it easier for people to send money abroad, as they would not need to convert it into another currency.
The launch of a CBDC in India could have a major impact on the global economy, as the country is home to a large number of people who do not have access to traditional banking services. If a CBDC was launched in India, it could potentially help to reduce poverty and increase financial inclusion.
The RBI is still in the early stages of exploring a CBDC, and it is not yet clear if or when one will be launched in India. However, the country's central bank is clearly taking the possibility seriously, and the launch of a CBDC in India could have a big impact on the global economy.
Crypto firms are not satisfied with the central bank’s justification given in the its concept note for CBDC replacing virtual digital assets. They argue that the RBI's reasoning is flawed. In the concept note released on Friday evening, the RBI stated that it is the responsibility of the central bank to provide its citizens with a risk-free central bank digital currency that will provide the users with the same experience of dealing in currency in digital form, without any of the risks associated with private cryptocurrencies.
The CEO of a leading crypto exchange, who spoke on the condition of anonymity, said: "Is CBDC another Bitcoin? The central bank is comparing apples to oranges. Cryptos are tokens. CBDC is a digital currency. Are we comparing stocks to INR? I didn’t realise the only objective of CBDC was to substitute virtual digital assets."
His view was echoed by other industry executives as well, who said that the concept note showed that the regulator was adopting a somewhat constrained, conservative and out-of-date perspective on cryptocurrencies. They noted that globally, the pretext and premise of CBDCs are born out of a thought process to defend the fiat currency monopoly, and that in India, the RBI's approach reflects a resistance to cryptocurrencies rather than a willingness to coexist with them.
Some executives even welcomed the RBI’s move. UniFarm CEO said that the concept note takes a very nuanced approach towards the implementation of CBDCs within the Indian financial ecosystem and carefully projects positive use cases of digital currency in making India a truly digital economy.
Meanwhile, 105 countries, representing over 95 per cent of global GDP, are considering a CBDC, up from 35 countries in May 2020, according to the Atlantic Council's CBDC tracker.
CBDCs, or central bank digital currencies, are a type of digital currency that is issued by a central bank. They are different from traditional digital currencies, such as Bitcoin, in that they are backed by the central bank and can be used in the same way as regular currency.
CBDCs have the potential to change the way the global economy works, as they could make it easier for central banks to interact with each other and with commercial banks. They could also make it easier for people to send money abroad, as they would not need to convert it into another currency.
The launch of a CBDC in India could have a major impact on the global economy, as the country is home to a large number of people who do not have access to traditional banking services. If a CBDC was launched in India, it could potentially help to reduce poverty and increase financial inclusion.
The RBI is still in the early stages of exploring a CBDC, and it is not yet clear if or when one will be launched in India. However, the country's central bank is clearly taking the possibility seriously, and the launch of a CBDC in India could have a big impact on the global economy.